Li Ka-shing buys Dutch waste management firm

WASTE TO ENERGY:A CKI executive says the purchase of AVR fits in well with his firm’s investment requirements. The deal needs to win approval from European regulators

AFP, HONG KONG

A consortium led by Asia’s richest man, Li Ka-shing (李嘉誠), yesterday said it had agreed to buy a Dutch waste management company, in a deal worth more than US$1 billion.

The HK$9.7 billion (US$1.25 billion) acquisition of AVR Afvalverwerking BV (AVR), which specializes in turning waste into energy, is the second waste processor investment made this year by Li’s Cheung Kong Infrastructure Holdings (CKI, 長江基建集團), which is leading the consortium.

In January, CKI made a HK$3.2 billion investment in New Zealand’s Envirowaste.

“The acquisition of AVR will see us investing in a leading waste management company in Europe, possessing the largest energy-from-waste plant capacity in the continent,” Kam Hing-lam (甘慶林), group managing director of CKI, said in a statement. “It fits in well with CKI’s stringent investment requirements, generating immediate recurring cash flow with profitable and stable returns.”

CKI and Li’s flagship company Cheung Kong Holdings Ltd (長江實業) both have a 35 percent stake in the consortium, with Cheung Kong subsidiary Power Assets Holdings having 20 percent and the Li Ka Shing Foundation holding a 10 percent stake.

AVR has a 23 percent market share of the Netherlands’ waste processing industry with stable revenue streams from long-term contracts for gate fees and waste processing as well as revenue from generated energy, the statement said.

CKI, chaired by Li’s eldest son and heir to his Cheung Kong conglomerate, Victor Li (李澤鉅), is involved in the development, investment and operation of infrastructure business in North America, Europe, Australia and Asia.

CKI in 2011 acquired Northumbrian Water Group, one of Britain’s biggest water utilities, in a deal worth nearly US$4 billion.

The 85-year-old Li was ranked in March as the eighth-wealthiest person in the world by the Forbes rich list, with a net worth estimated at US$31 billion.

The deal, which needs approval from regulators including the European Commission’s competition authority, is expected to close in the third quarter of this year.